• Huge growth of industry in the late 19 thcentury
• It went up a lot, a million tons of production; big changes – big growth
• We can stress technology, creative entrepreneurship, public policy,
experience of huge numbers of workers. No matter which, what everyone
at the time saw was the creation of vast, highly visible concentrations
of economic power and also political power
o Level of inequality (social and political) which became a
defining characteristic of the gilded age so much that people
today also say it’s a new gilded age.
I. Major contexts
A. Public policies
• Very favorable policies to businesses to promote industrial growth
o High tariff on imports that subsidized industrial growth
o Fairly open borders to facilitate mass immigration (so that
you could have lots of workers)
o Very little regulation of workplace safety, no workmans
compensation, etc. – so you get a lot of accidents. –
dangerous – not just in factories, even rrs passed through
cities at ground level without warning
o Allowed systems of boom and bust, no regulations until ww2
o In downturns, you had huge business closures and lots of
o Panic of 1873, 1890s ish
o In half of the years 1873-1900 were years of economic recession
o Unemployment rose dramatically in 1890 from 3%-12% to 1894 -
o Healthcare on cash basis (no insurance)
o Homeless people slept on the floors of police stations
o We we have seen how unemployment sucks so imagine how much it
would have sucked back then, esp at 18%!
• Massive rr building of the 1870s
• In 1914, the US had 250k mi of rr track – more than the whole rest of
the world combined!
o Stimulated a range of innovations and improvements
o Steel replaced iron
o Automatic thingy, air brakes
o Rrs were super expensive and so they needed to raise capital
that dwarfed anything before
o Investment banking developed!
o Produced John Murray Forbes, Cornelius Vanderbilt (shipping &
NY Central (RR)), Jay Gould (speculator who invented the
leverage buyout *combined companies to make tons of debt)
o Bessemer converter (Andrew Carnegie)
Also integrates production in the steel industry so the
entire production process is inside his form.
Horizontal? Vertical? Consolidation.
o Vast iron mining in the Great lakes region
o Huge amounts of coal – coal mining boooom! o Expansion of businesses providing consumer goods because you
could ship stuff easily across the nation
o New ways to sell food and clothes, development of the
department store (Macy’s, Fields, etc)
o Catalogue companies who sold goods to farmers (Sears) by rail
o Mass production of Automobiles
• Modern capital market, DOW JONES industrial avg was created – started
at 41, closed yesterday at 150,029.
• The system of Out of this Furnace was not the only nor the
prototypical way to run things
• The leading business moguls of the period were a whole lot different:
II. Robber barons
• Suggests a kind of criminality – sort of like pirates, at the very
least anti social haha
• They liked to call themselves “captains of industry”
• Why wasn’t the prototypical business leader of the period like Edison?
He invented a whole bunch of stuff! Like the research lab in addition
to the lightbulb, s